Restoration of sound taxation principles should be govt's next big reform

It's foolish not to tax things the demand for which is inelastic. This was the reason why salt used to be taxed till Gandhiji opposed it and the salt tax was abolished after independence

A huge fuss is being made about higher fuel prices. Sonia Gandhi has even written a letter about it to the prime minister. She has called it ‘extortion’. But her knowledge of history and economics — and more importantly economic history — is nothing to write home about. So, unlike the Congress party, we can ignore her safely.
 

What we cannot and must not ignore, however, are four simple facts. Indeed, it’s because economists know these facts that they are not supporting the Opposition on this issue. They know the government is right.
 

The four facts that need reminding are